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Mexico: Federal Government may use Private Property and Skip Procurement and Other Rules in Response to COVID-19

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On March 27, President López Obrador issued an executive order establishing extraordinary actions to be taken to combat COVID-19. The order was published in the Federal Official Gazette.

This executive order provides that the Secretary of Health will be able to use all existing resources (which may include infrastructure as well as other fixed assets) in the public, private and social sectors, to respond to the COVID-19 outbreak, without obtaining prior authorization.

In addition, procurement for domestic and overseas goods, services, merchandise and materials related to the Secretary’s response to the COVID-19 pandemic, will be exempted from competitive bidding procedures. The Secretary must avoid price speculation and stockpiling of necessary essential supplies. To increase supplies, the Secretary of Health may import and authorize imports of needed products, without complying with regular administrative procedures.

Despite the foregoing, the Secretary of Public Administration issued an official communication establishing that Internal Control Bodies will be responsible for oversight of government purchases to prevent, detect and address corruption risks in the health sector. Additionally, she emphasized that the Citizen Reporting System — a reporting mechanism allowing citizens to report administrative offenses or corruption by public officials or private parties — continues to operate and is receiving reports electronically.

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Jonathan Edward Adams heads Baker McKenzie's compliance team in Mexico and is the Global Compliance Practice Group's regional coordinator for Latin America. He has extensive experience in corporate, pharmaceutical and compliance law, having worked seven years in the US and 13 in Mexico and Central America. Jonathan combines a US-based perspective on legal implementation and compliance issues with years of on-the-ground experience in Latin America. He works closely with client commercial teams to implement innovative solutions to legal challenges. He is admitted to practice law in Mexico and two US states.

Author

Reynaldo is a member of the Firm’s Corporate and Transactional Practice Group. He is a professor at the University Anáhuac del Norte where he teaches foreign investment as part of the master of laws program, and an instructor at Universidad Panamericana's Baker McKenzie Seminar. He joined the Mexico City office in 1986, handling foreign investments, banking and finance matters and international agreements. He also worked in the Chicago office's Latin America Practice Group, advising on investments and acquisitions in Latin America (1996-1997). In 2000, Reynaldo co-founded the Firm’s Guadalajara office, where he led the Banking & Finance Practice Group. In August 2005, he transferred to Baker McKenzie's Cancun office as a founding member and director mainly handling tourism and real estate projects. In 2009, he transferred back to the Mexico City office, where he was local managing partner for four years and thereafter became national managing partner of the Firm in Mexico until August 2018.

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